Last September, Guillermo Leon Jaramillo deposited a paycheck into his own bank account for the first time in his life.
Though he, his wife and their two daughters emigrated to this country from Colombia in 1996, never before did they have a safe place to tuck away their money.
For this undocumented family of four, their new debit card ended 15 years of paying cash-only at the supermarket and hoarding their savings at home.
"I aspire to build a credit history and get a credit card in the future," said Jaramillo, 48, of Astoria, Queens, who works full time as a maintenance man at a building in the same neighborhood.
Jaramillo was one of the first people to benefit from financial services that the Brooklyn Cooperative Federal Credit Union began offering last summer through its Fuerza Cooperativa (Cooperative Power) program to members of Make the Road New York, a non-profit, membership-led organization operating in Brooklyn, Queens and Staten Island.
Jaramillo is among hundreds of immigrants, both documented and undocumented, who manage their money at the Brooklyn Cooperative – one of many small, community-based financial institutions that offer savings and checking accounts, tax income preparation and loans for their clients.
These services are pivotal for many immigrants who cannot use more well-known financial institutions due to government regulations that have tightened financial rules for people who cannot prove they have legal status.
Francisca Montaña, a membership organizer at Make the Road, says that to benefit from the Fuerza Cooperativa program, a person has to be both a Make the Road and Brooklyn Cooperative member. The applicant then must pay a one-time $100 fee to Make the Road and a $10 fee to Brooklyn Cooperative.
"To start a credit history, Brooklyn Cooperative loans the $100 to the applicant without asking for proof of income or legal status. The only requirement is to show a picture ID – their passport, for example – and a letter mailed to their current address," Montaña said.
New members are automatically approved for the loan, and Brooklyn Cooperative reports it to the three credit bureaus – Experian, Equifax and TransUnion, Montaña added.
Brooklyn Cooperative disburses the money directly to Make the Road, Montaña said.
Then Brooklyn Cooperative opens a savings account for the new Fuerza Cooperativa member and issues a debit card that can be used anywhere such cards are accepted.
"The program has all the services of a bank, and there is no fine print," Montaña said.
Andrew Friedman, co-director of Make the Road, says that the Fuerza Cooperativa program is 100% nonprofit thanks to grants from three New York-City based foundations: the New World Foundation, the Open Society Foundations and the Mertz Gilmore Foundation.
"In the last two months, close to 500 people have signed on to the program," Friedman said. "And we’re looking forward to signing between 1,000 and 2,000 people this year."
Daniel Gonzalez, loans program director at Brooklyn Cooperative, said that after the first loan is paid, a member builds a credit history that helps meet the requirements for personal and business loans, auto or mortgage loans.
"The personal and business loans are between $10,000 and $50,000, at an 11% interest rate," Gonzalez said. "Mortgage loans are up to $500,000, at a 6 % annual rate."
For the mortgage loans, Gonzalez explained, applicants have to be permanent residents or U.S. citizens, have a 20% down payment for the property and show proof of income and a sound credit history.
Mexican-born Vicente Torre, a U.S. permanent resident and owner of Tepa Construction Inc., moved to New York from Oklahoma six months ago after he and his wife divorced. He went to the Mexican Consulate and heard about Make the Road and the Brooklyn Cooperative. Torre became a member of both organizations.
The cooperative has been helping him rebuild his credit history. He opened a savings, a checking and a business account there despite previously having accounts at larger banking institutions. The cooperative also helped him prepare his income taxes three weeks ago, for free, through the VITA (Volunteer Income Tax Preparation) program, another service that Fuerza Cooperativa offers.
"I’m moving my money over because I like them better than my commercial banks," Torre said. "I’m taking some construction courses now. As soon as I finish them, I’ll request a business loan to start off my company – maybe $5,000."
Meanwhile, Jaramillo says he is grateful for the service the Fuerza Cooperativa program is giving him and is sure in the future he will need a loan to start up his own business.
"I have to drive the company’s van. My driver’s license expires this year, and I may lose my job," Jaramillo said. "[Fuerza] knows who I am, and paying back would not be a problem for me. That is the only door I can knock right now."
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